No matter the current state of your personal finances, there are bound to be actions you can take to improve them further. Being wise with your finances can be hard, yet it’s incredibly rewarding and is well worth the effort. Without further ado, let’s break down 12 financial hacks that should be obvious!
1. Skip Takeout And Fast Food
Eating out is a huge expense for most people. Staying in and cooking can not only help your wallet but your health as well. For the average person, this is usually the first and easiest tip for them to tackle to see a significant financial benefit. This is easier said than done, but if you make the effort to cook your own food then you’ll rapidly see the results!
2. Limit Smoking And Drinking
You don’t have to entirely drop drinking or smoking, of course. You’re an adult, and you can enjoy life the way you want. However, if you limit your alcohol and cigarette consumption, you may be able to add some hefty padding in your budget. In general, when it comes to your vices, finding a way to enjoy them in moderation is usually for the best!
3. Drink More Water, Less Sugar
All this junk food and sugary beverages are destroying everyone’s health. Simultaneously, it can be outlandishly expensive at times. If you want to cut back a bit and save money, then drop sodas and juices with added sugars. Focus instead on water and healthier juices or tea and coffee.
4. Spend Less Than You Make
This one is really simple, but a lot of average people are overlooking it. Focus on spending less than you make. Don’t over complicate this. You don’t necessarily need the newest and best of everything, and if you have a hard time keeping your spending in check – it’s time to make a budget.
5. Budgeting
First off, I’ve talked about budgeting before, especially for beginners. I’ve also written a complete guide that can help you from start to finish. I understand that it can seem like a daunting task at first, but budgeting isn’t that hard – especially if you keep it simple.
Naturally, the point of the budget is to stick to it. So make a budget that helps you reach your financial goals, but one that is also realistic for you to stick to. A budget is pointless if there is no way for you to adhere to it!
A lot of people also like to increase their spending whenever they get pay raises. Don’t fall for it! It’s a trap, and one that will set you back. Once you have made your initial budget – and tweaked it until it’s perfect for you – you shouldn’t change it unless there are major life events.
6. Automate Your Finances
You need to choose how much you can invest on a regular basis. These routine investments should be an amount that won’t break your bank, but it should be one that really helps you towards a financially secure future. Once you’ve decided on that amount, you should choose a brokerage and set up automatic deposits. The frequency is up to you. A lot of people do it on payday, to immediately take the money out so they don’t spend it, or just once a month.
If possible, you should invest even more than what you do automatically. If you get a bonus, make more money, are able to save more, or end up with more money for any reason, just use it to get ahead with your investments! Invest as much as you can and your future self will thank you immensely.
M1 Finance is my personal favorite brokerage, but Fidelity and Vanguard are also great!
7. Pretend You’re Poor – Participate In Stealth Wealth
Stealth wealth is basically just building up your finances, but not drawing attention to it or making many people aware of it. This involves people thinking you have less than you do. That will happen with stealth wealth because of things like living beneath your means, not sharing every purchase, or not advertising all the assets you have to your friends and family. Stealth wealth isn’t lying, although you could technically do that. Stealth wealth is just about not drawing attention to it, shoving it in someone’s face, or confirming your financial status.
When you participate in stealth wealth, you’ll find yourself spending less naturally. However, you’ll also notice fewer people expect or ask you to spend money when you’re out and about!
8. Kill Impulse Shopping
Stop shopping online randomly or buying items on an impulse. For many people, this leads them to spend exponentially more than they would otherwise. If you can keep your impulse shopping under control, then you can probably save a lot of money in the process. Window shopping, for example, is a common practice you should avoid because it leads to impulse shopping!
To help decide if you really need or want an item, a common rule of thumb is to wait 7 days before you make the purchase. The idea is that if you still truly want it, then you can get it since you’ve done your due diligence and waited. More often than not, this will end with you not making the purchase, which can save you a lot of money over time.
9. Buy In Bulk
Some of this goes without saying, but just in case you haven’t really bought items in bulk before I wanted to stress a few things. First, don’t buy something in bulk if you haven’t tried it before. It’s an unnecessary gamble, and it often has an unpleasant result. Second, make sure you have all the space you need at home to store your new purchases. If you haven’t prepared for it, buying in bulk can eat up a lot of your pantry space fast. Last, buying in bulk is the best time to use coupons and sales. This will help you save even more money, so make sure you pay attention to any discounts that are available.
So, if you want to buy in bulk, be sure you’re prepared and can use whatever it is you purchase before it goes bad. Don’t buy something just because there is an option to buy it in bulk either. Test it first and do the math to see if you’re actually saving money. While buying in bulk can help you cut costs, it does have a bit of a barrier for entry. If your budget is already maxed out, make sure you can afford the membership fees and the extra expenses in the short-term from buying in bulk.
10. Avoid Lifestyle Creep
By this point, you likely have a solid budget. Now, once you create a budget and iron out the details, it should rarely change. Don’t fall prey to the trap of lifestyle creep. As your income increases, keep your spending the same (or lower it). Your spending should not increase unless there is a significant life event – like a marriage or birth.
11. Pay Off High-Interest Debt
Eliminating pesky, high-interest debt is one of the best uses of your money. Think of it this way, eliminating debt is a guaranteed return. As a general rule of thumb, I consider anything with an interest rate over 5% too high and an absolute emergency to take care of. Some people may disagree with that, but that’s my personal line. Avoid taking on new debt (that is part of what emergency funds are for) and tackle your existing debt with the best method that works for you.
Again, the biggest caveat here is that you need to stay disciplined and be consistent to eliminate all of your debt. It probably will take a good deal of time, so don’t expect overnight success. Take your small victories and eagerly wait for the day when all of your major debt is gone.
Of course, the best way to eliminate debt is to avoid it in the first place!
12. Don’t Be Afraid Of New Opportunities
Whether it’s with your career, business, or just a side hustle – always be on the lookout for new opportunities. I know they can be scary at first, since they’re often risky, but don’t be afraid! Make your decisions carefully, and if it is sensible, then pursue those new opportunities. If you never take any risk, then that can be a problem too!
Conclusion
Hopefully these financial hacks gave you some insight to help you work on your own personal finances. If you have any thoughts, or tips of your own, be sure to let us know in the comments.
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